Mayor remains optimistic over future of South East timber mills

Grant District Council mayor, Richard Sage, says he's optimistic that the Tarpeena mill will be purchased in the near future.

"I'm keeping my fingers crossed over the next month that things should progress and get better," he said.

The future of two South East timber mills, Tarpeena and Kalangadoo, came into question yesterday when owner of the mills, Gunns, went into voluntary adminstration due to huge debt.

The company, which has struggled financially for some time, delivered the message to its 600 employees across the South East and Tasmania, leaving their jobs in a state of uncertainty.

Its banks, including ANZ, have refused to extend more than $500 million worth of loans and suppliers have not been paid for months.

While Mr Sage concedes it's upsetting, he is redirecting his focus into keeping the mill in operation.

"It's been happening for a while, it's just sad that it's come to fruition.

"We need to focus on getting as much as we can for suppliers and entitlements to local workers.

"At the same time, we need to find a buyer for that mill and keep it in operation," he said.

Mr Sage says that he will eventually be working to ensure money comes back to suppliers, but at this stage local government will take a back seat.

"We'll let the dust settle, let the administrators come in, I know the union is working vigourously to ensure the workers get their entitlements.

"They're continuing to operate the mill which is good because it makes it viable to sell," he said.

Treasurer Jack Snelling has hinted at redirecting a $27 million assistance package that was rejected by Carter Holt Harvey to go towards timber mills affected by the Gunns administration.

Mr Sage hopes the government steps-in, but he says it may be a bit early to finalise what the solution is.

"If you look at the whole region it's been under a cloud for a while so anything to boost our timber industry is good but I think our state and federal government need to look at what's happening to the industry from dumping cheaper products on the market from overseas," he said.